Written by: Jeremy Shafer
First, the numbers.
- 2,000,000: According to Statistic Brain, over 2,000,000 marriages took place in 2009.
- 61%: Financial illiteracy rate based on FINRA study (try it here).
In total over 4,000,000 people, a majority of them financially illiterate, merged their financial lives in marriage. Future studies will tell us how this turns out. Common sense tells us there’s work to do. Here are five considerations for marriage and money.
Discuss your unique history with money
We all have a long-standing relationship with money. Talk through that relationship together. Discuss your memories of money. How did your parents handle it? How did it impact the family? Who managed the money? What are your expectations of yourself and your spouse?
Know your role
There are two types of money people – savers and spenders – and often a marriage includes one of each. It’s important to communicate about your role in the marriage. Who will act as the family CFO? Do you need to review your financial situation monthly, quarterly, or annually? How much can either spouse spend without consulting the other? Defining your individual roles will help the transition.
Merge finances… or don’t
Now that you are happily married, how far does the merge go? Do you combine all bank accounts? Do you pay all bills jointly? Do you save for purchases, college, and retirement together or maintain independent financial lives? Both courses have merit and healthy marriages can operate either way.
A high school football coach frequently shared these words with his team, “Every day you either get better or you get worse. You can’t stay the same.” If you aren’t improving, you’re falling behind. Don’t be too concerned with what you do or don’t know. Just focus on learning more, improving your financial IQ, and planning for a successful financial future.
Attack problems, not people
Money can be a heated topic. If you place the problem between the two of you and start swinging, chances are you’ll both get hit. If you put the problem in front and fight it side by side, you’ll stand a much better chance of resolving the problem and strengthening the marriage.
Next week… Parents + Money